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13 May 2016
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TRS Board of Trustees Meets, Pressure on TRS-Care Fund Escalates

The Teacher Retirement System of Texas (TRS) Board of Trustees met today, May 13, in Austin to discuss various topics, including potential premium and plan design alternatives for TRS-Care. The retiree health benefits program includes the three standard plans (Tiers 1, 2 and 3), as well as the fully-insured Medicare Advantage Plans and the Medicare Part D Plans.

TRS Executive Director Brian Guthrie updated the trustees on the progress of the TRS-Care interim legislative committee and the status of the TRS-Care fund balance. Guthrie stated that “we are cutting it very close on the ending fund balance for TRS-Care for fiscal year 2017.”

As of today, TRS-Care is projected to have a negative balance of $18 million by August 2017. This increasing financial pressure may force the TRS Board to action this year.

The good news is that the projected negative fund balance has continued to decrease month over month. However, due to the unpredictability of medical costs, Guthrie could not say that the balance would increase or decrease in the coming months.

Fluctuations could affect TRS-Care in either a positive or adverse way, and there is no guarantee of receiving supplemental funding from the Legislature during the 85thLegislative Session. Director Guthrie felt that mitigating the shortfall using methods that are within the purview of the Board of Trustees—actions that don’t require legislative action or approval—should be considered sooner rather than later.

Guthrie stressed that the only opportunity to help prevent a negative fund balance is now, as waiting until 2017 to enact any changes is not enough time to have an effect. If changes are approved, they will be adopted in June 2016 and go into effect in September.

Possible options that the board may consider include:

  • Premium or out-of-pocket increases;
  • Limiting network access; and,
  • Enhanced network management.

TRS Chief Health Care Officer Katrina Daniel emphasized that it is important to avoid creating too much disruption or dissatisfaction with plan participants.

The chart above provides an overview of options and how they impact both the members, as well as the overall plan and the potential for savings. Pairing options together could help mitigate the impact to the members as well.

When first reviewing these options, the projected shortfall to TRS-Care for fiscal year 2017 was closer to $75 million. Per Ms. Daniel, if no other options were utilized, an increase of approximately 20 percent in premiums would be needed to effectively mitigate a shortfall of $75 million.

Information YOU Need to Know: How Changes May Impact You and Your TRS-Care!

Every 5 percent increase in retiree premiums is the equivalent of approximately $20.8 million. Mandatory Medicare Advantage participation for all members could save the plan $25 million, but would create a lot of disruption for participants. Mandatory Part D participation would save the plan between $5.5 and $6.5 million (with considerably less disruption than a mandatory Medicare Advantage change).

Another consideration is using tiered pharmacy networks, which would create savings between $6 and $10 million.

Mandatory mail order for pharmacy prescriptions could result in $8 to $10 million in savings. This option was the most thoroughly discussed by the board, with Chairman David Kelly questioning why this feature was not already in place.

Daniel cautioned the trustees that it is vital that any changes made must be within the parameters set by the federal government so that TRS-Care can maintain its grandfathered status in the Affordable Care Act.

No recommendations are being made to the trustees by the TRS staff at this time;however, these are the options that are being studied. Some options may be recommended during the June TRS Board of Trustees meeting.

A TRS Retiree Advisory Committee meeting will be held next week, allowing the committee an opportunity to review all possible options in greater detail and make recommendations if necessary.

These discussions will pertain to the short-term budget options regarding the future of TRS-Care. The Texas Legislature will grapple with long-term changes to the program during the upcoming 2017 legislative session.

As our members know, the Texas Retired Teachers Association (TRTA) supports pre-funding of the TRS-Care retiree health insurance program by the Texas Legislature. While pre-funding TRS-Care is the best option for its long-term solvency, and the method that would be most fair to plan participants, it is the most expensive option for the Legislature. It would cost the state a total of $2.7 billion during the 2018-19 biennium and $2.8 billion during the 2020-21 biennium to pre-fund TRS-Care.

The bottom line is this: more revenue is needed to keep TRS-Care solvent. The current pay-as-you-go method has almost been as expensive as a pre-funded method. A pre-funded method would be similar to the TRS pension fund, which receives yearly contributions from the state, active educators, and school districts.

Though most education associations in Texas concur that pre-funding is the best option for TRS-Care, the reality of how the fiscal issues with the program will be resolved remains to be seen, and will be a point of contention during the 85th Legislative Session.

The fact is that TRTA and our members are leading on this issue. We are grateful for the attention being given to TRS-Care; TRTA knows that we have many friends in the Texas Legislature. The solution to this difficult problem may include different benefit strategies; however, TRTA believes that no matter what may be discussed regarding the health care plan, a serious discussion on additional state revenue is needed to keep this plan intact now and for the future.

Said more simply, TRS-Care is out of money and all public education retirees participating in TRS-Care need to join TRTA in this fight for additional state funding!

You can help TRTA get this message out. This projected immediate shortfall is alarming and it shows how delicate the funding situation is for your retiree health care program. PLEASE send this email to your fellow retirees, friends, former colleagues, active educator friends and family members. NOW is the time to enlist as many TRTA members as possible to help us address this issue.

Members will make the biggest difference on how the legislature responds to this issue. TRTA membership is $35 annually, and those dollars help us represent you on this important topic. But, we also need your voice and your support through email and phone calls to legislators asking for their attention and help on the TRS-Care funding troubles.

Please encourage your fellow retirees, friends, and colleagues to become a member of TRTA as we work to protect your TRS-Care health insurance program. Click here to join TRTA or renew your membership!

New Trustees Appointed to TRS Board

The Board also welcomed two new trustees who were appointed by Governor Greg Abbott during today’s meeting. Governor Greg Abbott has appointed John Elliott and Greg Gibson for terms set to expire August 31, 2021.

John Elliott of Austin is a partner at Smith, Robertson, Elliott & Douglas, L.L.P. He is a member of the American Bar Association, State Bar of Texas, Austin Bar Association, International Council of Shopping Centers, Urban Land Institute and the Real Estate Council of Austin. Elliott received a Bachelor of Business Administration in Accounting and a Juris Doctor from The University of Texas at Austin.

Greg Gibson of Schertz is superintendent of Schertz-Cibolo-Universal City Independent School District. He is a member of the Texas Association of School Administrators and National Baldrige Award Panel of Judges. Additionally, he is a board member and examiner for the Quality Texas Foundation. Gibson received a Bachelor of Science and Master of Arts in education from Midwestern State University and a Doctor of Education from the University of North Texas.

Abbott also reappointed Christopher Moss to the Teacher Retirement System of Texas (TRS) Board of Trustees. Mr. Moss is from Lufkin, and serves as president of Allendale, Inc. DBA The Advanced Financial Group. He is a member of the National Association of Insurance and Financial Advisors, board member of the Angelina County Fair and a committee member of Angelina County Go Texan. Moss received a Bachelor of Science from Texas A&M University and a Master of Business Administration from Sam Houston State University.

TRTA would also like to take this opportunity to thank Nanette Sissney, current Vice Chair of the TRS Board of Trustees and a school counselor at Whitesboro Independent School District. Ms. Sissney was appointed to the board in 2009 by then Governor Rick Perry, and will complete her term this August 31.

Nanette is also immediate past president of the Texas Classroom Teachers Association (TCTA), a previous second vice-president of the Delta Kappa Gamma Kappa Zeta Chapter, and has served as a trustee for the First United Methodist Church of Whitesboro and as a volunteer with the Whitesboro Ministerial Alliance. She has been an educator for 23 years, including teaching government and economics for 12 years. Prior to her work as an educator, she spent many years as a financial auditor and analyst in the private sector.

Sissney represented active school employees during her time on the board, and participated in the Ethics, Audit, Investment Management, Benefits, Budget and Compensation Committees during her service. Her years of dedication and leadership are appreciated and will never be forgotten.

Thank You

Thank you for your membership to TRTA. We will continue to follow the progress on TRS-Care, and provide you many more opportunities to get involved!

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

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12 May 2016
0

House Speaker Straus Emphasizes Importance of Retiree Health Care for State Budget

Earlier this week, Texas Speaker of the House Joe Straus released a letter to the members of the House Appropriations Committee regarding his concerns for the state budget and the many factors that must be considered during the 85th Legislative Session that begins in January 2017.

One of those concerns is the TRS-Care retiree health insurance program. Straus stated that “even with the critical infusion of funding to TRS-Care last session, a sustainable, long-term solution is still needed.”

Straus also noted that “writing a balanced and disciplined budget that appropriately funds our top priorities is going to be a significant challenge.” As the members of the Texas Retired Teachers Association (TRTA) know, TRS-Care faces a budget shortfall of $1.6 billion next session, putting the 250,000 participants of the program at risk of skyrocketing premium increases, benefit changes, or both.

The Texas Legislature has been making TRS-Care a priority during the interim between sessions, appointing a legislative committee to review potential solutions to the fiscal issues as well as the long-term sustainability of the program. The legislative members named to this group are: Senators Joan Huffman (R-Houston) – Co-Chair, Jane Nelson (R-Flower Mound), and Craig Estes (R-Wichita Falls); and Representatives Dan Flynn (R-Canton) – Co-Chair, Trent Ashby (R-Lufkin), and Justin Rodriguez (D-San Antonio).

On March 30, the committee held its first hearing to discuss TRS-Care, which TRTA reviewed in the Inside Line. During the meeting, each legislator was divided on how to approach the conversation of solving the TRS-Care crisis.

Senator Craig Estes (R-Wichita Falls) began the meeting by providing a statement of determination, but halfway through conceded that solving the crisis would require everyone to contribute.

Representative Phil Stephenson however was adamant that retirees should not have to have any cost increases or benefit reductions. “It should be the burden of the actives and the state,” Stephenson said.

Tim Lee, TRTA’s Executive Director, outlined the issues surrounding the program, including the prolonged issue of the program being a “pay-as-you-go strategy.” This current strategy required the state to provide $768 million to keep the program solvent through the current biennium, which is what Speaker Straus was referencing in his press release.

The bottom line is this: more revenue is needed to keep TRS-Care solvent. The current pay-as-you-go method has almost been as expensive as a pre-funded method. A pre-funded method would be similar to the TRS pension fund, which receives yearly contributions from the state, active educators, and school districts.

While pre-funding TRS-Care is the best option for its long-term solvency, and the method that would be most fair to plan participants, it is the most expensive option for the Legislature. It would cost the state a total of $2.7 billion during the 2018-19 biennium and $2.8 billion during the 2020-21 biennium to pre-fund TRS-Care.

Achieving pre-funding might be a lofty goal, as Straus indicated that the state sales tax has “registered five monthly declines,” and crude oil prices are averaging $37 per barrel, down from $60 per barrel. While Straus noted that Texas is “better able to weather the peaks and valleys of a volatile energy market,” he warned that Appropriations Committee members will have to make difficult choices to balance the state’s budget.

Though most education associations in Texas concurred that pre-funding was the best option for TRS-Care, the reality of how the fiscal issues with the program will be resolved remains to be seen, and will be a point of contention during the 85th Legislative Session.

The fact is that TRTA and our members are leading on this issue. We are grateful for the attention being given to TRS-Care; TRTA knows that we have many friends in the Texas Legislature. The solution to this difficult problem may include different benefit strategies; however, TRTA believes that no matter what may be discussed regarding the health care plan, a serious discussion on additional state revenue is needed to keep this plan intact now and for the future.

Said more simply, TRS-Care is out of money and all public education retirees participating in TRS-Care need to join TRTA in this fight for additional state funding!

Please encourage your fellow retirees, friends, and colleagues to become a member of TRTA as we work to protect your TRS-Care health insurance program. Click here to join TRTA or renew your membership!

Flooding Impacts Greater Houston Area

TRTA has thousands of members that reside in the Houston area. As you may have read in the newspaper or heard about on television, Houston and surrounding areas have experienced severe flooding as a result of torrential rains over the past several days.

At this time, we would like to remind all of our members that our charitable partner organization, the Texas Retired Teachers Foundation (TRTF), has a program to assist Texas public education retirees financially during critical emergencies. “A Helping Hand” began in 2010, and has assisted 88 retirees with over $84,000 in grants since that time.

TRTF is calling on members of TRTA to make donations to the program in anticipation of receiving applications for assistance. Members may donate online or call the TRTA state office at 1.800.880.1650 and ask to speak with the accounting department.

TRTF is also calling on members to let the organization know of any retirees who may need assistance. Applications for assistance are available by sending an email to help@trtf.org or calling 1.800.880.1650 and asking for Cindee Sharp. The program may be able to help retirees with purchasing food, performing home or car repairs, or with lodging due to displacement.

Thank you for spreading the word about “A Helping Hand.”

Thank You

Thank you for your membership to TRTA. We will continue to follow the progress on TRS-Care, and provide you many more opportunities to get involved!

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

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12 May 2016
0

Primary Runoff Elections Coming Soon!

Thousands of voters turned out for the Texas Primary Election on Super Tuesday. According to the Texas Tribune, “more than 4.2 million Texans turned out to vote in the Republican and Democratic primary presidential elections, about 30 percent of registered voters.” We know that many of our members and their fellow retirees were a part of this dedicated group of people!

Many elections in Texas, particularly for seats in the Texas Senate and House, are decided during the Primary Election and not during the November General Election. A complete list of results from the March primary election can be found here.

While many races now have narrowed down the list of candidates for the Republican and Democratic seats to one contender, there are several runoff elections that our members should keep an eye on.

Be sure to mark your calendars and make a plan to get out and vote! Even fewer voters participate in a runoff election than in a primary election! That means even one vote — your vote! — can change the outcome of an election.

The Primary Runoff Elections will be held on Tuesday, May 24, 2016. Early voting will begin on Monday, May 16, 2016 and continue through Friday, May 20. Details about mail-in ballots and voter registration can be found here.

While it is common for voters to skip the Primary Runoff Election, TRTA wants our members to know that YOUR VOTE MATTERS! If you live in an area where there will be a Primary Runoff, get early voting on your schedule NOW! Please make voting a top priority this month!

Runoff Elections to Watch

TRTA will be following several races closely as the runoffs draw near.

Texas Senate Primary Runoff Races

Senate District 1
Senator Kevin Eltife is retiring. Republican candidates facing each other in the primary runoff are: Bryan Hughes and David Simpson. There are no Democratic candidates vying for this seat.

Senate District 24
Senator Troy Fraser is retiring. Republican candidates facing each other in the primary runoff are: Dawn Buckingham and Susan King. Democratic candidate Virginia Leeder won the Democratic primary.

Texas House Primary Runoff Races

House District 5
Representative Bryan Hughes has stepped down to run for the Texas Senate. The following Republican candidates will face each other in the primary runoff election: Cole Hefner and Jay Misenheimer. There are no Democratic candidates vying for this seat.

House District 18
Representative John Otto is retiring. The following Republican candidates will face each other in the primary runoff election: Ernest Bailes and Keith Strahan. There are no Democratic candidates vying for this seat.

House District 54
Representative Jimmie Don Aycock is retiring. The following Republican candidates face each other in the primary runoff election: Austin Ruiz and Scott CosperSandra Blankenship won the Democratic primary.

House District 73
Representative Doug Miller faces challenger Kyle Biedermann in the Republican primary runoff. There are no Democratic candidates vying for this seat.

House District 128
Representative Wayne Smith faces challenger Briscoe Cain in the Republican primary runoff. There are no Democratic candidates vying for this seat.

Thank You

Thank you for being a member of TRTA! If you are not a member and are interested in joining, please contact our Membership Department at 1.800.880.1650.

Protecting your retirement benefits is one of TRTA’s top priorities, and your participation makes all the difference! Be sure to stay tuned to our other digital mediums to stay informed on all the latest news and updates. Like us on Facebook, follow us on Twitter and subscribe to our YouTube channel.

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